Stocks fade after Fed discloses split on stimulus
NEW YORK — A two-day rally in the stock market came to an end on Thursday afternoon when an account of the Federal Reserve's last meeting revealed a split between bank officials over how long the Fed should keep buying bonds to support the economy.
The Dow Jones industrial average and the Standard & Poor's 500 index treaded water for much of the day, then slid into the red about 2 p.m. after the Fed released the minutes from its December meeting.
The Dow ended with a loss of 21.19 points at 13,391.36.
The S&P 500 lost 3.05 points to 1,459.37, and the Nasdaq composite fell 11.70 to 3,100.57.
At last month's meeting of the Federal Reserve's policy-making committee, the central bank pledged to buy $85 billion of Treasurys and mortgage-backed bonds and keep a benchmark interest rate near zero until the unemployment rates drops below 6.5 percent.
On Thursday, the minutes from that meeting showed Fed officials were divided over the bond purchases. Some of its 12 voting members thought they should continue through this year, while another group thought they should be slowed or stopped much earlier. Just “a few” members saw no need for a time frame, according to the minutes.
The stock market opened on a weak note after retailers reported mixed holiday sales and as the prospect of a new budget battle in Congress loomed.
UnitedHealth Group led the Dow lower.
The insurance giant's stock fell $2.55 to $51.99 when analysts at Deutsche Bank and other firms cut their ratings on the stock.
The Dow soared 308 points on Wednesday, its largest point gain since December 2011.
The rally was ignited after lawmakers passed a bill to avoid a combination of government spending cuts and tax increases called the “fiscal cliff.”
That deal gave the market a jump-start into the new year. The Dow and the S&P 500 are up more than 2 percent.